9911796707
TMI Blog1994 (1) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... First Schedule (hereinafter referred to as `the Tariff') appended to the Central Excises and Salt Act, 1944 (hereinafter referred to as `the Act'). According to the contracts the Railway Board of the respondent No.1 supplied to the petitioner rails free of cost for fabrication of the points and crossings. The rails are processed by fabrication or by process like cutting, chiselling, bending, curving, shaping etc. and they are then fitted with the help of nuts and bolts and other minor fittings to make them railway switches and crossings (points and crossings). Then, they are returned by the petitioner to the Railway Board. The points and crossings are rails and trains move over them and the difference in the use of the said items and the use of the ordinary rails is that they are used for changing the railway line when trains have to change rails at the station. The rails do not belong to the petitioner but they belong to the Railway Board and the petitioner merely carry out fabrication and/or processing and charge from the railway only fabrication charges in accordance with their job work done on these rails which are supplied by the Railway Board. The contract of the petitioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rails. In pursuance of this direction, the Superintendent, Central Excise, Bharatpur issued a show-cause notice to the petitioner requiring them to show-cause as to why he should not be required to pay the amount of duty specified therein. The particulars of the show-cause notice have been reproduced by the petitioner at page 6 of the writ petition which read as under :- PARTICULARS OF SHOW CAUSE NOTICE Show cause notice No. date Period to which short levy relates Amount of short levy to be adjusted C.E. 20/GEW/68/79/ 2202, dated 23-11-1979 1-3-1975 to 23-11-1979 Amt. of differential duty to be determined by us on the basis of the causes shown in SCH C.E. 20/GEW/11/79/ 876, dated 20-5-1980 24-11-1979 to 20-5-1980 - do - C.E. 20/GEW/63/79/ 219, dated 20-2-1981 23-5-1980 to 31-1-1981 - do - 4.Copies of these notices have been placed on the record as Annexures 3, 4 and 5 respectively. Therefore, by this show cause notice the petitioner has been called upon to pay the difference in the duty amount to be determined by the Assistant Collector. The petitioner submitted a reply to all these notices withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also been raised that the respondents have not decided the matter so far and, therefore, the writ petition is premature. The main thrust of the respondents is that the petitioner company also manufactures spikes, dog spikes, fish plates, slide chairs, C.I. castings, blocks, nut, bolts, washers etc. which are fitted according to different designs supplied by Railway according to requirement of these points, crossings and switches. It does not tantamount to minor operation of manufacture but nearly 25 items are being manufactured and fitted to make the complete product. The use of rails is also different since processed rails with different fittings are fixed in a manner that trains change track on speed without de-railment and loss of speed. So far as the contention regarding limitation under Section 11A of the Act is concerned, a plea has been taken by the respondents that the petitioner is guilty of suppressing facts from the department. Therefore, the petitioner is not entitled to the benefit of limitation. 7.I have heard the learned counsel for the parties and perused the record. As a matter of fact, the petitioner was driven to file the present writ petition only for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ways to the petitioner for only doing certain processing job and the same are returned to the Railways back by the petitioner. The respondents in their reply have submitted that the petitioner has to add certain new things and the rails acquire a new commercial name like points and crossings/switches. But the basic question is whether those rails which are being supplied by the Railway Board to the petitioner do they totally undergo a change and a new identity emerges or not. From the factual averments made from both the sides it emerges that the rails remained the rails only and they only undergo the small process by which the trains can negotiate at the station conveniently without derailment and loss of speed at the time of changing the track. Therefore, it appears that these rails which are being supplied by the Railway Board remain the same article with a small modification. Thus, from these factual averments we have to see that whether the notification is applicable in the present case or not. Each case has to be decided on its own facts. Therefore, we have to see that whether in these facts the present notification is applicable or not. 9.Now, in the back-ground of these f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be a job work. The plain and simple interpretation of this explanation is that the article is to be supplied by the supplier and the job worker has to supply that article back to the supplier after the article has undergone the intended manufacturing process. Whether it will acquire a different commodity and it will be known as different article in the commercial market or it will emerge as a new article. All these connotations are not in the explanation but they are artificially placed by the authority to frustrate the intended purpose for which this exemption notification has been issued. In fact, if this was the intention that after the job work is done the article should be fully chargeable then there was no purpose of issuing this exemption notification at all. It appears that the authorities after due application of mind realising the hardship to such job workers issued this notification so as to give relief to such job workers and the authorities which are now interpreting the notification by putting a construction which is not borne out in this explanation and are importing some thing else which is not there in the explanation and thereby they are frustrating the very pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only thing which the job worker has to do is to subject that article supplied by the customer to the intended manufacturing process. The final result after the manufacturing process is completed has to be returned to the customer and the job worker only charges for the job work done by him. Under these circumstances, it is clear that, though excise duty would be otherwise leviable on the value of the article as it leaves the job worker's factory by virtue of the Notification, excise duty has to be paid only on the charges for the job work and not on the total value of the articles when it leaves the factory of the job worker. No other meaning is possible on the wording on this particular Notification." 10.This judgment has been further followed in the case of Associated Pigments Limited v. Collector of Central Excise, Calcutta and Others (1983 (13) E.L.T. 876 (Cal.)) and in that case, it was found that the conversion of pure lead or lead ingots into suboxide and lead monoxide does not amount to manufacture as envisaged by Section 2(f) of the Central Excise Act. Therefore, they are entitled to exemption under Notification No. 119/75-C.E., dated 30-4-1975. In that case the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turing process. An article is not subjected to a manufacturing process unless the result is intended to be something different. It is, therefore, clear that the notification must apply to a factory which does job work for the purpose of manufacturing an article, the raw material for which is supplied to it by its own customers and accordingly it is held that the demand raised by the assessing authority is not correct. In this connection, the judgment given in the case of M/s. Anup Engineering Ltd. (supra) has been followed. 15.Therefore, the view which I have taken is substantially stands supported by the judgments of the various High Courts as quoted above. 16.Learned counsel for the respondents has invited my attention to a decision of this Court delivered by the Jaipur Bench in the case of Pratap Engineering Works Ltd. Ors. v. Union of India and Others (S.B. Civil Writ Petition No. 327/81, decided on 30-4-1992). I am informed that a special appeal has been preferred against this judgment. In this case, certain raw materials were supplied by M/s. National Engineering Industries Ltd., Jaipur, namely, steel tubes and strips for conversion on job basis into rollers, cages and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mal value of the wagon by virtue of Sections 3 and 4 of the Act. This case came up for consideration before their Lordships of the Supreme Court in a subsequent case i.e. M/s. Texmaco Ltd. (supra). In that case, the Notification No. 120/75-C.E., dated 30-4-1975 was pressed into service and in that case, M/s. Texmaco Ltd. pursuant to contracts entered into in this behalf with the Railway Administration fabricated and delivered to the Railways wagon bodies mounted on wheel-sets supplied by the Railways. The invoices raised by the appellant respecting these wagons reflected only the price of the wagon bodies without including the value of the wheel-sets on which the wagon bodies were mounted. The goods were cleared for purposes of excise duties on such invoice value. The Revenue raised demand for recovery of short levy and sought to recover the unpaid duty on the value of the wheel-sets also. The petitioner approached to the Tribunal and the Tribunal decided against the assessee and the assessee against this order approached the Hon'ble Supreme Court and sought to press into service the Notification No. 120/75, dated 30-4-1975 and submitted that in fact, the Central Government exempte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Ltd. (supra) was distinguished by their Lordship —- of the benefit under the Notification was not pressed into service. Therefore, the attempt on the part of the respondents to press into service that decision is of no avail primarily for the reason that the judgment has been explained by the Hon'ble Supreme Court in the subsequent judgment and secondly the issue involved in that case was Notification No. 120/75 and not 119/75, though both the notifications have been differently worded as is evident from both the notifications quoted above. But the intended purpose which appears from this notification is to grant certain exemptions to the manufacturer and that has to be construed in the context for which such exemption has been granted. 21.Therefore, I am of the opinion that the Notification No. 119/75-C.E., dated 30-4-1975 intended to give the benefit of exemption to such job workers and in the present case the rails which are being supplied by the Railway Board to the petitioner for converting them into points and crossings remain the same and, therefore, the petitioner assessee is entitled to the benefit of the aforesaid notification. 22.Since I have decided the basic is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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